Legal Action Archives

Great News for Real Estate Investors! – click below for details

Federal Court Approves Class Action on Ohio City’s Illegal Home Inspections

National REIA Applauds US District Court Ruling Upholding Fourth Amendment that Protects Property Owners from Unnecessary Gov’t Harassment
Cincinnati, Ohio)  The National Real Estate Investors Association (National REIA) issued a statement today applauding the U.S. District Court’s (Southern Ohio) recent decision stating that the city of Portsmouth’s (Ohio) occupational licensing requirements, which are imposed upon landlords violates the Fourth Amendment to the United State Constitution. 
 
Charles Tassell, Chief Operating Officer of National REIA said “Today’s ruling laid bare the excuses used by local governments to steal the freedoms of property owners.”
He further added that “The 4th Amendment is still alive and well, and citizens should NOT be forced to have their homes intrusively ‘inspected’ by warrantless searches.  Every local government should take note that warrantless searches are STILL illegal and unconstitutional.”
 
Regarding the ruling itself, Tassell said “The ruling won by the 1851 Center For Constitutional Law was a victory for freedom against a tyranny with which the Founding Fathers were all too familiar.  Citizens of the United States have an expectation to live without local, state or federal inspection of their home based on flimsy excuses disguised as law.”
 
Judge Susan Dlott, of the Western Division of the Southern District of Ohio, held as follows: “[T]he Court finds that the Portsmouth [Rental Dwelling Code] violates the Fourth Amendment insofar as it authorizes warrantless administrative inspections.  It is undisputed that the [Rental Dwelling Code] affords no warrant procedure or other mechanism for precompliance review . . . the owners and/or tenants of rental properties in Portsmouth are thus faced with the choice of consenting to the warrantless inspection or facing criminal charges, a result the Supreme Court has expressly disavowed under the Fourth Amendment.”
 
For more information and to read a copy of the the Court’s ruling visit www.realestateinvestingtoday.com.

September 3, 2015 4:49PMforeclosure_forsale_sign

 

In total, Fannie Mae increased the maximum number of allowable days for a foreclosure sale for 33 states, effective for foreclosure sales on or after Aug. 1.

Fannie Mae made the announcement Thursday in an email to its servicers.

According to the announcement, Fannie Mae increased the maximum number of allowable days for the following jurisdictions: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Nevada, New Mexico, New Hampshire, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.

As part of its servicing guide, Fannie Mae establishes time frames under which it expects routine foreclosure proceedings to be completed.

According to Fannie Mae, the maximum number of allowable days takes represents the maximum allowable time lapse between the due date of the last paid installment and the completion of the foreclosure sale.

The allowable time frame also signifies the time typically required for what Fannie Mae calls a “routine, uncontested” foreclosure proceeding.

The allowable time frame reflects the legal requirements of the applicable jurisdiction, and takes into consideration delays that may occur outside of the control of the servicer, Fannie Mae said.

If the number of days to complete a foreclosure sale exceeds stated maximum number of allowable days and the servicer does not provide an adequate explanation to Fannie Mae as to the reasons for the delay, Fannie Mae requires the servicer to pay a “compensatory fee.”

According to Fannie Mae, the list of “reasonable explanations” includes:

  • Bankruptcy
  • Probate
  • Military indulgence
  • Contested foreclosure
  • The mortgage loan is currently in review for HAMP
  • The mortgage loan is in an active mortgage loan modification trial plan or unemployment forbearance
  • Recent legislative, administrative, or judicial changes to existing state foreclosure laws, provided that the servicer is diligently working toward resolution of the delay to the extent feasible

Fannie Mae noted in its announcement that there is currently a compensatory fee moratorium for Washington D.C., Massachusetts, New York and New Jersey and stated that the moratorium will last, “at a minimum,” until Dec. 31.

Can an S corporation own an interest in another business entity?


An S corporation may own an interest in another business entity.

An S corporation can be a member of an affiliated group by owning 80 percent or more of the stock of a C corporation. The group then can elect to file on a consolidated basis, if other affiliated group rules are met. But the S corporation itself cannot join the consolidated group.

Although in general only individuals can be shareholders in an S corporation, an S corporation can own an S corporation if the subsidiary corporation would otherwise qualify as an S corporation if the parent’s shareholders held the subsidiary’s shares directly, and the taxpayer elects qualified S corporation status for the subsidiary.

Generally, for federal tax purposes a corporation that is a qualified S corporation subsidiary is not treated as a separate corporation, and all assets, liabilities, and items of income, deduction, and credit of a qualified S corporation subsidiary are treated as assets, liabilities, and items of income, deduction, and credit of the S corporation.

An S corporation can also be a partner in a partnership or a member of an LLC.

 

J. Michael Grinnan, CPA.CITP
Certified Public Accountant
9900 Corporate Campus Drive
Suite 3000
Louisville, KY 40223
Main Number 1-502-657-6333
Email Mike@JMGCPA.com.

 

A federal judge in Brooklyn explained in a court memo released on Wednesday why he rejected a landlord’s attempt to use a child’s Hispanic ethnicity to argue for reduced damages in a lead poisoning case.

Judge Jack B. Weinstein ruled that the attempt violated federal law governing the use of statistical generalizations based on race or ethnicity, and forbid experts on both sides to discuss them.

A lawyer for Mark Kimpson, the landlord, was seeking to reduce the $2 million in damages awarded to the child and his mother after she sued over lead poisoning.

A jury awarded the damages on July 10 after finding that the apartment the family rented from Mr. Kimpson contained lead-based paint that had not been properly removed or contained.

“Posed is the question,” Judge Weinstein wrote, “can statistics based on the ethnicity (in this case, ‘Hispanic’) of a child be relied upon to find a reduced likelihood of his obtaining higher education, resulting in reduced damages in a tort case? The answer is no.”

To contest the damages, Mr. Kimpson’s lawyer, Roger V. Archibold, needed to persuade the court that the boy’s prospects for attending college and earning a degree if he had not had lead poisoning were already low. Mr. Archibold argued that because Hispanics are less likely to attend college, the boy’s chances for doing so were improbable.

In a 52-page memo, Judge Weinstein wrote that he rejected the argument based on a case in which the use of race- and ethnicity-based statistics was found to be in violation of the Constitution’s equal protection and due process clauses.

The memo on Wednesday does not affect the jury verdict, which Mr. Archibold has appealed to the Court of Appeals for the Second Circuit.

Mr. Archibold said Judge Weinstein had “mischaracterized” the defense’s argument about the child’s ethnicity. Mr. Archibold said he was confronting an expert hired by the plaintiffs whose statements at the trial did not seem to line up with the study he was citing.

“The expert was confronted with the evidence of the study that he quoted,” he said. “He opined that the study gave him these statistics and it did not.”

Judge Weinstein added that Mr. Archibold was required to use specific characteristics of the child and his family, rather than the characterization of the child as a member of a particular ethnic group, in projecting damages. The boy’s father has a bachelor’s degree and his mother has a Master of Fine Arts. Both held responsible income-generating jobs, the family was stable, and the parents were caring, Judge Weinstein said.

“Based upon his specific family background, had the child not been injured, there was a high probability of superior educational attainment and corresponding high earnings,” Judge Weinstein wrote. “Treated by experts as a ‘Hispanic,’ his potential, based on the education and income of ‘average “Hispanics” in the United States,’ was relatively low.”

The boy’s mother, Niki Hernandez-Adams, rented a basement apartment from Mr. Kimpson in an old building at 490 MacDonough Street in Bedford-Stuyvesant, where she lived while pregnant and after the boy turned 1.

During a visit to the pediatrician after his first birthday, the boy was found to have elevated levels of lead in his blood. Ms. Hernandez-Adams claimed in her lawsuit that the lead poisoning had damaged the boy’s central nervous system.

Mr. Archibold argued that Mr. Kimpson had sufficiently contained the hazardous lead-based paint in the apartment. Before the family moved in, the landlord had covered the old paint with new paint and drywall, according to the judge’s memo.

Mr. Archibold blamed the family’s dog for severely scratching the walls and the moldings in the apartment, releasing lead dust. He also claimed that the infant’s cognitive and behavioral difficulties resulted from other medical conditions of his mother during her pregnancy.

 

DODD FRANK FOR TODAY’s INVESTOR

by attorney Harry Borders

PART TWO- RESTRICTIONS ON OWNER FINANCING!!!

 

           

Here’s the GOOD NEWS… Investor buyers can STILL get financing from any source they want.

 

Here’s the TERRIBLE news… Owner occupant buyers now have lots of restrictions place on who they can get a loan from.

 

These new rules impact “contract for deeds” and “Land Contracts” as well as seller retained mortgages (and, of course, the ever present contract for deed in disguise as a lease-option) and private financing. 

So, assuming an owner occupant wants to obtain a loan from a source other than  a bank or mortgage company, here are the new rules.

If the lender only lends once in a 12 month period, the lender:

a) MUST be a “natural” person (i.e. not an LLC or corporation);

b) MUST have owned the property (i.e. no private financing, only owner financing);

c) MUST NOT have built the home in the ordinary course of his/her business;

d) MUST NOT have a negative amortization;

e) MUST be for at least 5 years, and if longer and adjustable, must be tied to an index rate, such as Libor   

 

If the lender lends 2 to 3 times in a 12 month period, the lender MAY be an LLC or corporation.  But the lender also:

a) MUST have owned the property (i.e. no private financing, only owner financing);

b) MUST NOT have built the home in the ordinary course of his/her business;

c) MUST NOT have a negative amortization;

d) MUST be FULLY AMORTIZED;

e) if the rate is adjustable, it must be fixed for at least 5 years, and it must be tied to an index rate, such as Libor; and

f) MUST determine in good faith that the consumer has a reasonable ability to repay the loan (similar to what a loan officer would do).

 

If the lender lends more than 3 times in a 12 month period,

all of the above requirements for a lender lending 2 to 3 times in a 12 month period apply and

IN ADDITION, the lender MUST BE A LICENSED LOAN OFFICER.

           

As you can see, navigating the waters of seller financing has again become tricky.

Please check with your real estate attorney before embarking on a seller financing transaction for a dwelling.

 

Until next time, peace,

hCapture

Harry Borders

Harry@HarryBorders.com

502.894.9200

P.S. Your simple solution to stay out of trouble is to never offer seller financing to any tenant / buyer or owner occupant. You can use Seller Financing to sell to other Investors, not owner occupants.

check out this very interesting article on

Foreclosure Fraud Settlement Insider Secrets

Here is the link

http://www.rollingstone.com/politics/blogs/taibblog/while-wronged-homeowners-got-300-apiece-in-foreclosure-settlement-consultants-who-helped-protect-banks-got-2-billion-20130426?utm_source=buffer&utm_medium=twitter&utm_campaign=Buffer%3A%2BDarrellBouldin%2Bon%2Btwitter&buffer_share=bdab7

This is an example of how you must be very careful in what you say and how you say it when dealing with prospective applicants for your rental properties.

Please note, if you have someone doing this for you, showing rentals, etc. “Whatever they say or do, it is the same as if YOU are saying it.”

What are you comments on this?

 

A Property Management Company based in Virginia Beach, VA, Will Pay $82,500
to settle allegations it refused to allow a Hispanic woman to apply for an apartment because she did not speak fluent English.

The company allegedly had a policy of not renting to persons with limited English proficiency.

The Fair Housing Act prohibits discrimination in the rental of housing on the basis of national origin. “Denying housing because a person does not speak English well violates the Fair Housing Act,” said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity.

The case came to HUD’s attention when a Hispanic woman filed a complaint alleging that the property management company, which manages over 500 rental units throughout Virginia Beach and Norfolk, refused to provide her a rental application because she could not speak English well.

The complaint further alleges that the leasing agent refused the translation assistance of the bilingual person the applicant brought with her.

HUD launched an investigation to determine whether the alleged discrimination was systemic. In the course of the investigation, HUD discovered that the company had a written policy expressly requiring all prospective tenants to be able to communicate with management staff in English without assistance from others, and to complete rental applications only while they were in the management office.

By agreement, the company will pay the prospective tenant $7,500, and will donate $25,000 each to local housing advocates. In addition, the company agreed to adopt a non-discrimination policy, which it will distribute to current residents and prospective tenants; adopt a plan to more effectively serve residents and prospective tenants with limited English proficiency by providing translation and interpretation services; and require its employees to undergo fair housing training.

Landlords Better Watch This Closely and Take Action Now!

Kentucky led the nation on new law making Landlords the “Legal Owner” of their Tenant(s) Dogs. Now Pennsylvania follows in a close second.

Protect Yourself Now – Brand New Animal Application Forms Package

Will Your State Be Next?

ATTENTION LANDLORDS! Do NOT act like an ostrich. If you have tenants or if you are expecting tenants, you MUST take action on this now to “NIP IT IN THE BUD” as old Barney Fife screams. This will be coming to your town and your insurance company soon.

What are Your Comments about this new law and this article?

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Pennsylvania attorney Thomas J. Newell, who specializes in personal injury claims, announced that his firm has just obtained a $508,613.84 settlement from a landlord’s insurance carrier after a tenant’s pit bulls attacked a young boy.

The landlord allowed the tenant to keep the dogs.

According to Newell, the dogs jumped a three and a half foot fence into a homeowner’s yard and mauled the boy. He sustained serious injuries which required 17 surgeries.

His mother was also injured when she tried to help her son fend off the dogs. The family’s bills exceeded $500,000.

The landlord’s insurance company filed lawsuits in both federal and state courts arguing that, due to language in the policy, it could deny financial responsibility for the attack. However, Newell says he was successful in fighting those claims, and the insurance company ultimately conceded, agreeing to pay the victims the liability policy limits.

In July, an appellate court in Kentucky overruled a lower court’s decision that a landlord was not liable for injuries when a tenant’s dog bit someone across the street from a rental property.  Now, landlords in Kentucky may be viewed as “statutory owners” of tenants’ dogs simply by approving a pet request.

Protect Yourself Now – Brand New Animal Application Forms Package

Conversely, a Wisconsin court decided in March, 2011 that a landlord could not be held liable when a tenant’s pit bull attacked a neighbor, enforcing a longstanding policy in the state that landlords are only liable if the animal belongs to the landlord or is specifically under their control.  Judges found that being in control of the rental property is not enough to show control over the dog.

A number of cities and counties across the country, including some in Pennsylvania, have considered breed-specific legislation banning pit bulls and other breeds thought to have vicious propensities. Those laws have come under heavy opposition by animal rights advocates who say the individual dog, not the breed, determines whether the animal is a risk.

Newell  says he has recently represented a number of dog attack victims throughout Pennsylvania

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Protect Yourself Now – Brand New Animal Application Forms Package

Now you have seen this happen in Kentucky, Wisconsin, Ohio and this new law WILL SPREAD across America. Think about it. If you owned an insurance company, would this be a money saver for insurance companies.

Take action now.

Share this article, Email and forward to fellow investors and REIA Groups!

What are your thoughts?

A Georgia woman who headed DocX pleaded guilty to one count of conspiracy to commit wire and mail fraud Tuesday afternoon in a case that ties back to the robo-signing scandal and the mishandling of thousands of mortgage documents.

The case ends at least one part of the massive foreclosure document-handling crisis that surfaced in Florida in the wake of the housing crisis.

U.S. prosecutors say Lorraine Brown agreed to plead guilty in a scheme that involved the hiring of dozens of workers to sign and fraudulently notarize thousands of mortgage-related documents even though employees signing the forms were not authorized to do so.

The allegations in court records suggest Brown was hired by mortgage servicers to handle loan documents. When servicers used Brown’s services, she allegedly promised the availability of authorized signers to handle and authorize documents for mailings and public filings.

Prosecutors claim Brown reneged on those promises and began allowing in 2005 the forging and falsification of signatures on official documents tied to mortgages and foreclosure filings.  

A court filing by prosecutors says, “Unbeknownst to DocX clients, the authorized signers were instructed by Brown and other DocX employees to allow other, unauthorized DocX employees to sign, and to have the document notarized as if the actual authorized signer had executed the document.”

Brown pleaded guilty to one federal charge of conspiracy to commit wire and mail fraud in the U.S. District Court for the Middle District in Florida Tuesday. The offense comes with a possible 5-year prison sentence and up to $250,000 in fines.

Lorraine Brown’s path to federal court began during the massive demand for the moving of thousands of loan documents during the national foreclosure crisis. But Brown’s firm had been around in some formation for nearly two decades.

Brown is a Georgia resident who founded DocX in the 1990s in Ohio Click Here for Full Video/Article (Members Only)

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